BY MARTHA SVOBODA

antidiscrimination statutes.

It is primarily this third purpose,
commonly referred to as “fair lending,”
for which the HMDA Loan Application
Register (LAR) was developed through
HMDA’s implementing regulation,
Regulation C. Fair lending law requires
fair, impartial, and unprejudiced access to
credit for qualified persons by prohibiting
discrimination on the basis of any
characteristic that is protected by law.

These protected classes include race,
religion, national origin, sex, marital status,
age, those who have received public
assistance income, familial status, persons
with a handicap, and any applicant who, in
good faith, exercised any right under the
Consumer Credit Protection Act.

The theory of discrimination generally
associated with a fair lending analysis that
utilizes LAR data is known as “disparate
treatment.” One type of disparate

Martha Svoboda

The results of
a fair lending
analysis based
on actual data
should be more
predictable
and allow for
better business
planning.

The traditional focus of HMDA com- pliance has been, and continues to be, on the annual monitoring of
mortgage loan origination and mortgage
loan purchase activity. This article discusses possible benefits and challenges
from the recent amendments to the regulations implementing HMDA, specifically
those pertaining to fair lending analysis
of the data that is required to be collected by home mortgage lenders.

HMDA, as enacted and amended
over the years, has three primary
purposes. The first purpose is to
help assess whether home mortgage
lenders are serving the needs of their
communities. The second purpose is to
assist public officials in the distribution
of public-sector investment and the
attraction of private investment.

The third purpose is to assist in the
identification of possible discriminatory
lending patterns and the enforcement of